An tried boardroom coup at Johnston Press has been thwarted via a arguable “poison pill” defence that would hand regulate of the newspaper writer to its lenders.

Christen Ager-Hanssen, the activist shareholder plotting to oust chairman Camilla Rhodes and the corporate’s senior control, has been compelled to lengthen a decision for an Extraordinary General Meeting after advisers came upon the tripwire in bond paperwork.

This weekend Mr Ager-Hanssen was once in talks with attorneys at the City company Mishcon de Reya on the right way to circumvent the mechanism, referred to as a “dead hand proxy put”, in preparation for a brand new assault.

Johnston Press inserted the useless hand proxy put into its bondholder agreements when it final refinanced its £220m debt pile 3 years in the past. Such phrases can safe decrease rates of interest however too can cause a default if shareholders step in to nominate new administrators.

Only the present board has the energy to herald or approve administrators. Mr Ager-Hanssen’s plans can have intended Johnston Press would have needed to pay off its bondholders straight away, which the suffering corporate can’t have enough money. In any such situation, the lenders would achieve regulate of the corporate and shareholders could be burnt up.

Dead hand proxy places have come beneath scrutiny in the United States lately and feature been criticised as equipment that let forums to undermine shareholder sovereignty to chase away activists. A Delaware court docket has branded the tactic “highly suspect” amid claims it represents a breach of administrators’ tasks to shareholders, who’re not going to vote for trade that will hand an organization to its lenders.

Johnston Press is thought to be the first instance of an activist bobbing up towards any such poison tablet in the UK. Mr Ager-Hanssen, who owns 12.6pc of Johnston Press and the Swedish model of Metro, mentioned he was once searching for new routes to take regulate.

He has coated up new administrators together with the veteran newspaper government Steve Auckland to ship an intensive shake-up of the writer of the i and ratings of native titles, in an attempt to rebuild fairness in the corporate, which is recently dwarfed via its money owed.

He mentioned: “The poison pill cynically deprives shareholders of their fundamental right to change the board as they see fit. That power has been stolen from them. This is nothing short of corporate theft of power in which only the directors can decide who replaces them. The board seeks to play shareholder and bondholder interests off of one another in the hope that the balance of power can remain in the hands of a few cozy fat cats.”

Mr Ager-Hanssen is sponsored via different traders together with Crystal Amber, the largest shareholder with 18.2pc. It has criticised Johnston Press’s personal makes an attempt to restructure its money owed and the corporate’s remuneration insurance policies. Since 2013 the board has been paid £6.4m, whilst the corporate’s valuation has collapsed from greater than £100m to only £15m. Johnston Press declined to remark.